Music licensing is big business. Accordingly, ownership rights to famous songs are often the subject of litigation. Less than one month after “Happy Birthday” was finally declared to be in the public domain,1 the Second Circuit has determined the proper allocation of rights for one of the most popular Christmas songs.2

John Frederick Coots and Haven Gillespie wrote “Santa Claus is Comin’ to Town” in 1934 and granted the rights to the song to Leo Feist, Inc., the predecessor-in-interest of EMI Feist Catalog, Inc.3 At that time, the 1909 Copyright Act granted authors a 28 year copyright term, which was renewable for an additional 28 years.4 This renewal term allowed authors to negotiate with publishers after the initial term and potentially capitalize on the increased value of a work.5 Coots granted Feist the rights to his renewal term in 1951, anticipating that the song would enter the public domain in 1990.6

The Copyright Act of 1976 extended the term for all copyrighted works such that the song’s copyright was then set to expire in 2009.7 For copyrights that would extend further than thirty-five years past the date of execution of an original grant, the 1976 Act included provisions that allowed authors or their heirs to terminate grants that were executed prior to January 1, 1978 by providing timely notice to the grantee and recording a notice of termination with the copyright office.8 The 1976 Act also allowed authors or their heirs to terminate similar grants that were executed on or after January 1, 1978 in a similar manner.9

In 1981, Coots served Feist with a termination notice.10 Thereafter, Coots and Feist reached a new agreement and Coots assigned all rights to the song until the end of the “Extended Renewal Term of Copyright” to Feist.11 However, for reasons that no one can recall, the 1981 termination notice was never recorded by the Copyright office – a fact that almost proved fatal to Coots’ heirs’ claim.12

In 1998, the Copyright Term Extension Act extended the copyright term applicable to the song, which is now expected to enter the public domain on December 31, 2029.13 Starting in 2004, the family of the late John Frederick Coots made numerous unsuccessful attempts to reclaim the rights to his song.14 Finally, in 2012, they filed a complaint against EMI in the Southern District of New York.15

This case turned on whether EMI’s rights to the song were derived from the 1951 agreement or the 1981 agreement. If the 1951 agreement were the source of EMI’s rights, then the family would have no termination rights under any provision.16 However, if the 1981 agreement were the source of EMI’s rights, then the family could effectively terminate the agreement with EMI in 2016.

The District Court ruled for EMI, finding that the source of EMI’s interest was the 1951 agreement.17 Relying on principles of contract law, the Second Circuit reversed, ruling that the 1981 agreement superseded the 1951 agreement despite the fact that the 1981 agreement was not recorded with the Copyright Office: “The question is simply whether the parties intended for the new contract to substitute for the old one, and that intention, if otherwise clear, need not be articulated explicitly in the new agreement.”18

The rights to this classic Christmas tune will revert to the heirs of John Frederick Coots on December 15, 2016 – thirty-five years after the execution of the 1981 agreement.19